Masan's leap forward

Masan's Leap Forward: Discover the rapid growth of Masan Group across various sectors.

(Thanh Nien Newspaper) - After a year of taking over VinMart/VinMart+, Masan is transforming this retail chain, aiming to realize its vision of a 'unicorn' in the retail and consumer goods industry.

In the final days of 2020, Masan received good news when it was awarded the title of the company with the most outstanding M&A deals in 2019-2020. Despite a turbulent 2020, during which many businesses were harmed by the Covid-19 pandemic, Masan and its subsidiaries still completed major M&A transactions, including the acquisition of VinCommerce, NET Detergent, HCStarck's tungsten business platform, and the investment in 3F Vietnam. In particular, the merger with Vingroup 's VinMart and VinMart+ supermarket systems and VinEco farms helped Masan form a large-scale consumer goods and retail empire in Vietnam.

After acquiring this retail system, Masan faced considerable skepticism as VinCommerce was operating at a loss for many years. Masan Group Chairman Nguyen Dang Quang then shared: “Not everyone agreed with the VCM merger, but this is a revolutionary leap forward for Masan.” After a year, Masan's leap is yielding results as VinMart undergoes a significant transformation.

Decisive transformation

Before being acquired by Masan, VinCommerce, one of Vietnam's largest retail chains, had over 3,000 VinMart supermarkets and VinMart+ mini-supermarkets. Upon taking over VinCommerce, Masan's leadership quickly streamlined the store network, closing supermarkets with revenue below 50%. After nine months, 421 VinMart+ stores and 12 VinMart supermarkets ceased operations. Simultaneously, Masan launched the VinMart supermarket and VinMart+ store model with a new look and layout, prioritizing fresh produce. Furthermore, the company reduced operating costs, optimized its product portfolio, renegotiated with suppliers, and implemented new pricing policies.

Another major advantage Masan has in operating VinCommerce is its ownership of the MEATDeli chilled meat value chain. This allows VinCommerce to become a consumer goods retailer that can integrate its fresh produce production segment. Masan MEATLife's investment in 3F Vietnam, along with the addition of poultry products to its existing meat value chain, further enhances VinCommerce's competitive edge in the market. Thanks to these changes, VinCommerce's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin in Q3 2020 was only -2.8%, a significant improvement compared to -6.6% in the same period of 2019. VinCommerce's total revenue for the first nine months was VND 23,678 billion.

Meanwhile, Masan's core business of fast-moving consumer goods (FMCG) continues to grow strongly with many new innovations. As consumer trends shift towards eating at home instead of eating out due to the impact of the Covid-19 pandemic, Masan has launched many new convenient food products to capitalize on this trend.

Masan reaped the rewards as its Consumer Holdings achieved revenue of VND 16,359 billion in the first nine months, a 30% increase compared to the same period last year.

Thanks to this, The CrownX, Masan's integrated modern consumer and retail platform, achieved net revenue of over VND 40 trillion (USD 1.7 billion) in the first three quarters of the year. The CrownX's EBITDA margin reached 6.3%. Masan's share price on the stock market also reflects investor confidence in the group. From a price of less than VND 55,000 at the beginning of October, Masan's share price increased by more than 50% to over VND 80,000 per share. This is nearly three times the increase of the overall VN-Index.

In summary, for the year 2020, Masan Group achieved the targets set at the General Shareholders' Meeting: net revenue of VND 75,000 - 85,000 billion, and after-tax profit attributable to shareholders of VND 1,000 - 3,000 billion.

Revenue in 2021 could exceed 93,000 billion VND.

In 2021, Mirae Asset Securities assessed Masan Group's revenue growth prospects across all business segments as positive, with total revenue projected at VND 93,251 billion, representing an 18% year-on-year growth. Mirae Asset expected VinCommerce to grow by 19%, reaching sales of VND 38,701 billion in 2021.

In addition, Masan Consumer Holdings' revenue is projected to increase by 9% next year thanks to the continued launch of new products and the strong growth in the premium segment. The role of the "complete meal" product group is expected to become increasingly important.

Viet Capital Securities (VCSC) also offered optimistic forecasts, expecting Masan to achieve revenue of VND 93,100 billion. VCSC believes that VinCommerce's profit margin will improve as restructuring activities gradually yield results. Specifically, this retail system will continue to improve its fresh produce offerings to attract customers, along with increased investment and product innovation from partners to develop the brand and enhance logistics efficiency.

VCSC forecasts revenue growth for Masan's emerging product lines such as processed meat and household and personal care products to reach 40-60% in 2021, thanks to continued new product launches and leveraging the distribution system of VinMart and VinMart+.

Breakthrough changes for a global vision in 2025

The positive results in 2020 and the optimistic forecast for 2021 are just the first steps in realizing Masan's 2025 vision with its retail and consumer goods platform, The CrownX. Masan's leadership aims to have 10,000 retail stores by 2025. In addition, the group also wants to have 20,000 franchised outlets. Masan will support the operating model, products, and technology; while franchisees will be responsible for premises, finance, and personnel. With a total of 30,000 stores, Masan can serve 30-50 million Vietnamese consumers. With the potential of the retail and consumer goods market exceeding $100 billion, Masan expects to reach revenue of $5-10 billion within the next five years. The company also aims to be among the top 50 global retail brands.

"We look at market signals, understand consumer demand to acquire major brands, and implement new strategies through M&A deals," shared Danny Le, CEO of Masan Group.

In addition to M&A to expand its production portfolio, Masan also aims to become a preferred partner of major suppliers in product innovation and brand development, with the goal of building a proprietary product portfolio of up to 40%. This is the key to the success of the world's largest retail chains such as Walmart and Tesco.

Source: https://www.masangroup.com/vi/news/masan-news/Buoc-nhay-vot-cua-Masan.html